Since healthcare is temporarily off the radar screen, despite Republican attempts to have Romneycare declared unconstitutional (how Romneycare would be unconstitutional, but Medicare wouldn’t, well, that would be fun…), we can now return to the never-ending attempt by conservatives to gut Social Security. One of the key figures and bankrollers in that attempt is financier Peter Peterson. By key, I mean that he has spent around one billion dollars financing the Peterson Foundation, which advocates various ‘fiscal responsibility’ measures (i.e., making Granny eat cat food) and slashing Social Security benefits*. But as always, one must follow the money, since Peterson’s ‘charity’ seems rather self-interested–and not in the sense of ‘healthy children are good for all of us’ (boldface mine):
…we can get a sense of what is on the table by looking at the earlier agenda of Peterson’s Commission on Budget Reform. The Peterson/Walker plan would have slashed social security entitlements at a time when Wall Street has destroyed the home equity and private retirement accounts of potential retirees. Worse, it would have increased the Social Security tax, disguised as a “mandatory savings tax.” This added tax would be automatically withdrawn from your paycheck and deposited to a “Guaranteed Retirement Account” managed by the Social Security Administration. Since the savings would be “mandatory,” you could not withdraw your money without stiff penalties; and rather than enjoying an earlier retirement paid out of your increased savings, a later retirement date was being called for. In the meantime, your “mandatory savings” would just be fattening the investment pool of the Wall Street bankers managing the funds.
But, perhaps Peterson et alia are just fucking morons who suck at public policy? Let’s follow the money some more (italics mine):
Political analyst Jim Capo discusses a slide show presentation given by Walker after the “I.O.USA.” premier [a movie backed by the Peterson Foundation about how our debt makes us DOOMED!], in which a mandatory savings plan was proposed that would be modeled on the Federal Thrift Savings Plan (FSP). Capo comments:
“The FSP, available for federal employees like congressional staff workers, has over $200 billion of assets (on paper anyway). About half these assets are in special non-negotiable US Treasury notes issued especially for the FSP scheme. The other half are invested in stocks, bonds and other securities…. The nearly $100 billion in [this] half of the plan is managed by Blackrock Financial. And, yes, shock, Blackrock Financial is a creation of Mr. Peterson’s Blackstone Group. In fact, the FSP and Blackstone were birthed almost as a matched set. It’s tough to fail when you form an investment management company at the same time you can gain the contract that directs a percentage of the Federal government payroll into your hands.”
To put this in context, currently the annual Social Security revenues are over $700 billion. If, between rerouting money and increasing payroll taxes (cat food for all!), $350 billion could easily be diverted to firms like Blackrock. Even if Peterson’s company only gets part of that, he earns back his billion (which was tax-deductible of course) pretty quickly. And then
makesextracts a killing.
I’m certain that Peterson is a high-minded patriot concerned only about the fiscal health of our country (never mind that current deficits aren’t the terrifying problem he claims they are), but this is a massive conflict of interest.
And it should tell you what the real motivations of the ‘fiscal responsibility’ crowd are: protecting Wall Street and the wealthy at the expense of most Americans.
*As I’ve written many times before, without a decades-long economic slump, the annual revenue generated by the Social Security payroll tax plus the liquidation of the trillions of dollars of U.S. securities held by the Social Security Trust Fund will adequately cover all expected payouts. The budgetary crisis has to do with the general budget (and national debt). Why one would be motivated to consider slashing the most successful anti-poverty program in U.S. history as the first option in order to solve a general budgetary problem (as opposed to further reducing runaway Medicare costs, cutting other areas, or raising taxes–AAAIIEEE!!!) is, well, the subject of this post.